After the Fall

In this year’s annual Viewer Watch special report, the president and founder of Horowitz Research, Howard Horowitz, compares the state of the TV industry to the old nursery rhyme about Humpty Dumpty having a great fall.

It’s become apparent in recent years that the traditional big bundle of pay TV programming some consumers found bloated and expensive is also much more fragile than industry executives had imagined. Those bundles have fractured as record numbers of people cancel their video subscriptions and programmers follow them by launching direct-to-consumer streaming services.

This year promises to be a pivotal one for those trends, with existing big subscription VOD services like Netflix, Hulu, Disney+ and CBS All Access spending billions on new programming and major programming groups like WarnerMedia and NBCUniversal prepping high-profile direct-to-consumer launches.

In the nursery rhyme, this ends badly. Humpty Dumpty takes a great fall. And all the king’s horses and all the king’s men can’t put him back together again.

Not surprisingly, this year’s Viewer Watch report, which once again focuses on the changing use of video and how that’s affecting the industry, explores a number of disturbing trends. Humpty Dumpty’s fall — the fracturing of the pay TV bundle — has given consumers more choice and lots of great original content. But researchers also report that many consumers are complaining about the difficulty of managing their streaming subscriptions and finding content.

Meanwhile, the high-stakes competition among these new SVOD services is raising ongoing concerns about their financial viability. Market leader Netflix continues to burn through large amounts of cash — estimated to be around $3.5 billion in 2019 — and a survey from Magid found that consumers age 18-49 said they would pay for only five SVOD services.

Nonethless, industry executives, from researchers and traditional pay TV operators to digital media players, express a level of optimism about the TV industry that hasn’t been seen in a number of years. Horowitz and others point to a number of encouraging examples of how the industry is reassembling bundles of programming for a new generation of tech-savvy consumers. The resulting synthesis won’t look much like the Humpty Dumpty of old, but it could lay the foundation for a new decade of growth.

In assessing these trends, we are indebted to many people who made our annual Viewer Watch possible, both with interviews and data. We are particularly indebted to the research companies that contributed their insights and data, including Horowitz Research, Magid, Magna, PwC and Kagan.


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Viewer Watch 2020: The Charts